20140268_01_Pamlico Sound Bridge Corridor Cost Analysis (October 2012)_20150317

Bonner Bridge - NC 12 Transportation Management Plan
Phase II
Pamlico Sound Bridge Corridor Cost Analysis
for
NC 12 Replacement of Herbert C. Bonner Bridge
(Bridge No. 11) over Oregon Inlet
TIP Project No. B-2500
Dare County, North Carolina
North Carolina Department of Transportation
Final Report- Revised
October 24, 2012

Executive Summary

REPORT DATE: 10/24/2012
Summary
Purpose of Report
During the development of Phase II of STIP Project B-2500 (Replacement of the Herbert C. Bonner
Bridge — NC 12 Transportation Management Plan), NCDOT was asked by the US Army Corps of Engineers
(USACE) to provide an updated cost estimate and construction timeline for the Pamlico Sound Bridge
Corridor (PSBC), an alternative that had been studied during the project's NEPA process. The USACE also
requested that NCDOT identify any additional revenue sources that may be used to fund the project,
outside of those previously identified during the NEPA process. The USACE and the Federal Highway
Administration (FHWA) agreed that NCDOT should provide this information before moving forward with
Phase II of the project.
In order to address the USACE's request, the department conducted a review of the costs and funding
sources associated with the PSBC and STIP Project B-2500. This work included the following tasks:
• A review of all cost estimates for the PSBC developed during the project's NEPA process. This
review included all construction, right-of-way, operations, and maintenance costs associated
with the PSBC.
• Development of an updated (2012) cost estimate for the PSBC, accounting for changes in unit
construction material prices, inflation, and in the design requirements and recommendations for
a bridge in the PSBC. As part of this effort, NCDOT solicited independent construction cost
estimates of the PSBC from three national contracting firms with experience in bridge
construction projects. The product of this work is a list of costs associated with the construction
and maintenance of the PSBC for the project's 50-year life.
• Using the updated cost estimates for the PSBC, NCDOT reviewed all federal and state funding
sources that can be used to fund STIP Project B-2500 and determined the impact of the PSBC on
the department's transportation budget.
Using the information listed above, NCDOT re-evaluated whether the PSBC is a reasonable and
practicable alternative for STIP Project B-2500 and whether the determination of practicability that is
included in the May 2010 Environmental Assessment is still valid. The following report is a summary of
this effort.
Overview of Cost Estimate History
Since the initial development of the PSBC in 2002, NCDOT has prepared a series of estimates that
account for the costs associated with the actual construction of the PSBC, the purchase of property
currently within the PSBC, and the operation and maintenance of a bridge within the PSBC over the
project's 50-year life. These cost estimates (for the two alternatives within the PSBC) are summarized in
Table 1.

REPORT DATE: 10/24/2012
Table 1a. PSBC Curved Rodanthe Terminus
Construction Cost Operations and
Year Reason Low High MaintenanceZ Right-of-Way
2003 Preliminary Cost $294,300,000 NA $5,601,000
2005 SDEIS $416,800,000 $1,200,000 $6,890,000
2007 SSDEIS $933,500,000 $1.4 billion $356,400,000 $6,890,000
2007 Verification $997,000,000 NA NA
2008 FEIS1 $933,500,000 $1.4 billion $356,400,000 $6,890,000
2009 Section 4(f)1 $933,500,000 $1.4 billion $356,400,000 $6,890,000
2010 EA & ROD1 $933,500,000 $1.4 billion $356,400,000 $6,890,000
Table 1b. PSBC Intersection Rodanthe Terminus
Construction Cost Operations and
Year Reason Low High MaintenanceZ
2003 Preliminary Cost $292,600,000 NA
2005 SDEIS $414,200,000 $900,000
2007 SSDEIS $929,100,000 $1.4 billion $356,100,000
2007 Verification $997,000,000 NA
2008 FEIS1 $929,100,000 $1.4 billion $356,100,000
2009 Section 4(f)1 $929,100,000 $1.4 billion $356,100,000
2010 EA & ROD1 $929,100,000 $1.4 billion $356,100,000
1No new estimates prepared; document utilized the SSDEIS estimate.
ZAII costs through 2060.
Right-of-Way
$2,102,000
$5,245,000
$5,245,000
NA
$5,245,000
$5,245,000
$5,245,000
NCDOT reviewed each construction cost estimate prepared for the PSBC and the assumptions
associated with each estimate. The changes in the construction cost estimates typically occurred for the
following reasons:
• Changes in unit prices associated with bridge construction (the department estimates the
construction cost of a bridge based on a cost per square foot of bridge deck), primarily due to
inflation;
• The application of design-build, construction risk, and other inflationary factors, which were
updated with each estimate based on other similar project bids nationwide; and
• Changes in design assumptions for a bridge in the PSBC, including the bridge's dimensions and
terminus options.
The construction costs of the PSBC alternatives substantially increased between the 2005 SDEIS and
2007 SSDEIS. NCDOT revised the construction cost estimates prior to the SSDEIS based on both feedback
from several contracting and consulting industry representatives who attended the Bonner Bridge
Constructability Workshop in August 2006 as well as data on continuing inflationary pressure. The
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REPORT DATE: 10/24/2012
SSDEIS estimate reflected changes to the unit construction material prices and the addition of design-
build inflation factors to account for this construction delivery method. In order to determine the
reasonableness of the SSDEIS construction cost estimate, NCDOT hired Finley Engineering in 2007 to
conduct an independent preliminary construction cost estimate of the PSBC; the Finley Engineering
estimate ($997 million) was consistent with those prepared by NCDOT.
The operations and maintenance cost estimates for the PSBC, which included the maintenance of the
bridge and roadway portions of the project as well as traffic operations equipment recommended for
long bridges, also increased substantially between the 2005 SDEIS and 2007 SSDEIS. The 2005 estimate
was found to not adequately account for the inspection and maintenance effort that would be required
for a 17.5-mile structure. The 2007 estimate was developed on a unit (per-mile) basis in order to
account for the length of the structure and included the cost of annual bridge inspections and
maintenance as well as a one-time major bridge rehabilitation during the 50-year project life.
The SSDEIS construction, right-of-way, and operations and maintenance cost estimates were not
updated for the 2008 FEIS because the department still considered them valid. In 2009, FHWA
determined that the PSBC was not a feasible and prudent avoidance alternative under Section 4(f)
because the construction and maintenance of the PSBC presented a unique problem of extraordinary
magnitude for the state of North Carolina. Therefore, the PSBC would not be carried forward for further
detailed study. Following this decision, NCDOT did not prepare any further updated cost estimates for
the PSBC prior to the approval of the December 20, 2010 Record of Decision (ROD).
Post-Record of Decision Cost Estimates
Following the approval of the ROD, NCDOT determined that it was necessary to update the construction
cost estimates for the PSBC in order to address agency concerns on the implementation of Phase II of
STIP Project B-2500. NCDOT's first post-ROD construction cost estimate for the PSBC ranged between
$573 million and $629 million for the Curved Rodanthe Terminus option and between $569 million and
$625 million for the Intersection Rodanthe Terminus option (2011 dollars). The updated estimate was
based on unit material costs and contingency factors that were only updated to account for inflation and
bids on other comparable design-build projects. These new costs were between 39% and 55% lower
than those estimates last developed for the SSDEIS. Because of the magnitude of the price decrease and
the scope of the PSBC, NCDOT sought an independent review of the construction cost estimates, similar
to the independent verification conducted by Finley Engineering in 2007.
NCDOT selected three consulting firms (AECOM Technical Services of NC, Michael Baker Engineering,
and Armeni Consulting Services) with experience in the design and estimation of bridge replacement
and design-build projects to provide new construction cost estimates for the PSBC. Each firm was asked
to provide two estimates for the PSBC: the first, a simple update of the 2007 Finley Engineering
estimate, accounting for current unit material prices only; the second, a more detailed update of the
Finley Engineering estimate that accounts for both material price inflation and any changes in design
and construction requirements (based on the B-2500 Phase I Final RFP) that were not included in the
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REPORT DATE: 10/24/2012
original estimate. NCDOT provided each contractor with a copy of the Finley Engineering estimate and
design details of the PSBC; they were not provided copies of any previous detailed NCDOT construction
cost estimates.
A summary of the estimates provided by the three firms is included in Table 2; details on each firm's
estimate are included in Appendices C and D.
Table 2. Summary of 2012 Contractor Estimates for the PSBC
Firm � Task 11 I Task 2
AECOM $699,968,092 $1,068,068,482
Armeni $749,868,482 $1,017,719,740
Baker $809,258,154 $1,024,832,643
1As shown in Table 1, Finley Engineering's original verification estimate, completed in 2007, was $997
million.
NCDOT then used the estimates from AECOM, Armeni, and Baker to develop a new construction cost
estimate for the PSBC. The unit structure costs that are used in the NCDOT estimate are averages of the
three contractor estimates and the winning design-build bid for Phase I of the project. In addition, the
design-build escalation factor that was not included in the first post-ROD estimate was included in the
revised estimate, based on input from the three firms. The revised NCDOT construction cost estimate is
summarized in Table 3.
Table 3. 2012 PSBC Cost Estimate
Alternative
Cost Estimates Curved Rodanthe Intersection Rodanthe
Terminus Terminus
Construction $878 million $1.15 billion $876 million $1.146 billion
Operations and
Maintenance1 $379 million $379 million
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This estimate is between 6% and 18% lower than the construction cost presented in the FEIS. By using
the input from three independent contractors and the existing bid on B-2500 Phase I, it is a reasonable
estimate for the PSBC.
NCDOT also reassessed the operations and maintenance cost estimates associated with the 50-year life
of the project; these costs include those associated with maintenance of the roadway approaches,
annual inspection and maintenance of the bridge, one major bridge rehabilitation, and traffic operations
equipment recommended for long structures. The estimated 50-year operations and maintenance cost
for both alternatives within the PSBC is $379 million; 90% of this cost is the inspection, maintenance,
and rehabilitation costs associated with the 17.5-mile bridge.
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REPORT DATE: 10/24/2012
Finance Analysis
STIP Project B-2500 is eligible for federal transportation funding under the federal Bridge Program, the
National Highway System program, the Surface Transportation Program, and the Equity Bonus program.
Approximately 80% of the initial construction cost of STIP Project B-2500 will be paid for using federal
transportation dollars. The remaining 20% of the construction cost will be funded with state
transportation dollars through the North Carolina Highway Trust Fund. The North Carolina Highway
Fund will be used to fund the ongoing maintenance and inspection of the project after it is constructed.
The State Transportation Improvement Program (STIP) is the department's schedule for all major
transportation improvement projects and their anticipated cost for a period of seven years. For the next
STIP cycle (2014-2020), NCDOT estimates that $8.327 billion will be available to the department. The
state's Equity Formula requires that STIP funds be distributed equitably among the department's 14
divisions using a formula that factors population and the number of intrastate highway miles requiring
improvements. Based on the Equity Formula calculation for the next STIP period (2014-2020) and on
funds remaining from previous STIP periods, NCDOT's Division 1(the 14-county area within which STIP
Project 8-2500 is located) is estimated to have $953 million available for the seven-year STIP.
Table 4 summarizes the construction, operations, and maintenance costs associated with the PSBC for a
50-year project life.
Table 4. PSBC Construction, Maintenance, and Right-of-Way Cost Estimate (50-year project life)1
Curved Rodanthe Terminus Intersection Rodanthe Terminus
Low H igh Low H igh
Construction $878 million $1.15 billion $876 million $1.146 billion
Bonner Bridge Demolition $10 million $10 million
Right-of-WayZ $6,890,000 $5,245,000
Operations (Installation) $5,085,000 $5,085,000
Subtotal (InitialSTIP projectJ $900 million $1.172 billion $896 million $1.166 billion
Operations and Maintenance $374 million $374 million
(Ongoing, 50-years)
Total $1.274 billion $1.546 billion $1.270 billion $1.540 billion
1 Does not include costs associated with wetland and SAV mitigation, which would be funded at the time
of construction. Estimate does not include the additional non-highway public costs assessed in the
SSDEIS and FEIS.
Z SSDEIS estimate.
NCDOT would need to have between $900 million and $1.172 billion over the four-year estimated
construction period to fund the Curved Rodanthe Terminus option and between $896 million and
$1.166 billion available over the same period to fund the Intersection Rodanthe Terminus option. In
view of the $953 million estimated to be available between 2014 and 2020, construction of the PSBC
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REPORT DATE: 10/24/2012
would require at least 94% of the Division 1 budget for those years; that funding would have to be
available not just within the seven-year STIP period, but specifically during the life of the construction
contract. The estimated high cost of the PSBC would exceed the amount available to Division 1 by $219
million. The percentage of the total budget required would increase if NCDOT does not receive all of the
revenue it estimates receiving for the 2014-2020 STIP. If the PSBC were implemented, and assuming the
contract awarded was consistent with the department's low estimate for the project, only a few small
bridge replacements or other small projects could be funded in Division 1 during the STIP period.
Previous NEPA documentation for STIP Project B-2500 determined that the use of alternative financing
for the PSBC is not a viable option for this project. There is no new information on additional revenue
sources or legislative changes that would alter this conclusion.
Conclusions
The combined up-front construction, right-of-way, bridge demolition, and operations costs associated
with the PSBC would require the use of at least 94% of the total Division 1 budget for the 2014-2020
STIP cycle, which would require NCDOT to postpone almost all planned projects in Division 1 until after
2020. This assumes that the winning bid for the PSBC is consistent with the department's low cost
estimate for the project. Even if demolition of the existing Bonner Bridge and the installation of
operations equipment were postponed to the next STIP period, the PSBC would still require at least 93%
of the Division 1 budget. Construction of the PSBC would require the department to defer much needed
maintenance improvements throughout the Division for a significant period of time. A decision to build a
bridge within the PSBC is not reasonable in consideration of the projected bridge costs and the
uncertainty in the Division 1 projected budget.
Phasing the construction of the PSBC over a longer time period is not a reasonable option, since the new
bridge could not be opened to traffic until construction of the entire bridge was completed. Given that
the existing bridge has an extremely low sufficiency rating and is rapidly approaching the end of its
service life, phasing the completion of the project over multiple STIP periods is not an acceptable option
for the department.
While there is uncertainty as to the amount of future federal and state revenues available to NCDOT's
transportation program budget, there are no indications that the department's financial resources will
increase to the level necessary to support the construction of the PSBC and allow the department to
meet the most basic project needs of Division 1. The federal MAP-21 legislation, enacted in 2012,
provided Federal funding at levels similar to those in recent years under the previous SAFETEA-LU
legislation. Therefore, the construction of a bridge in the PSBC would still present a unique problem of
extraordinary magnitude to NCDOT, reaffirming the conclusions in the 2009 Revised Final Section 4(f)
Evaluation and the 2010 Environmental Assessment that the PSBC is neither a prudent nor practicable
alternative.
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REPORT DATE: 10/24/2012
NCDOT conducted an analysis of possible innovative financing options for the PSBC during the NEPA
process for STIP Project B-2500; there are no innovative financing options (loans, bonds, tolls) that
would entirely support the construction cost of the PSBC.
Based on the information gathered during this inquiry, the department's conclusion that the PSBC is not
a prudent or practicable alternative, based on its construction cost and the potential impacts to the
department's budget, remains valid.
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A Review of Cost Estimates for the Pamlico Sound
Bridge Corridor Alternatives

REPORT DATE: 10/24/2012
A Review of Cost Estimates for the Pamlico Sound Bridge Corridor Alternatives
Introduction
The Pamlico Sound Bridge Corridor (PSBC) alternatives were first developed in 2002 for STIP Project
B-2500 on the basis of several screening criteria; the development of the PSBC is discussed in detail in
the project's Final Environmental Impact Statement (FEIS). The NEPA/Section 404 Merger Team
selected the PSBC to be studied in detail in the SDEIS on February 12, 2003.
The PSBC begins on Bodie Island near the existing northern terminus of Bonner Bridge, extends into the
Pamlico Sound, bypasses the PINWR and ends north of the emergency ferry dock in Rodanthe (FEIS
Figure 2-11). There are two alternatives within the corridor, which differ only at their southern terminus:
the Pamlico Sound Bridge Corridor with Curved Rodanthe Terminus rejoins NC 12 via a curve that
connects the bridge directly with NC 12 in Rodanthe (FEIS 2-90); and the Pamlico Sound Bridge Corridor
with Intersection Rodanthe Terminus, which ends at a signalized intersection north of the Liberty
Service Station (FEIS 2-90). A bridge in the PSBC would be approximately 17.5 miles (28.2 kilometers) in
length; if constructed, it would be one of the longest bridges in the world.
This section documents the construction, operations and maintenance cost estimates that have been
prepared for the PSBC since its development in 2002. These cost estimates are summarized in Table 1.
Table 1a. PSBC Curved Rodanthe Terminus
Construction Cost Operations and
Year Reason Low High MaintenanceZ Right-of-Way
2003 Preliminary Cost $294,300,000 NA $5,601,000
2005 SDEIS $416,800,000 $1,200,000 $6,890,000
2007 SSDEIS $933,500,000 $1.4 billion $356,400,000 $6,890,000
2007 Verification $997,000,000 NA NA
2008 FEIS1 $933,500,000 $1.4 billion $356,400,000 $6,890,000
2009 Section 4(f)1 $933,500,000 $1.4 billion $356,400,000 $6,890,000
2010 EA & ROD1 $933,500,000 $1.4 billion $356,400,000 $6,890,000
Table 1b. PSBC Intersection Rodanthe Terminus
Construction Cost Operations and
Year Reason Low High Maintenancez Right-of-Way
2003 Preliminary Cost $292,600,000 NA $2,102,000
2005 SDEIS $414,200,000 $900,000 $5,245,000
2007 SSDEIS $929,100,000 $1.4 billion $356,100,000 $5,245,000
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REPORT DATE: 10/24/2012
2007 Verification
2008 FEIS1
2009 Section 4(f)1
2010 EA & ROD1
$997,000,000
$929,100,000 $1.4 billion
$929,100,000 $1.4 billion
$929,100,000 $1.4 billion
NA NA
$356,100,000 $5,245,000
$356,100,000 $5,245,000
$356,100,000 $5,245,000
iNo new estimates prepared; document utilized the SSDEIS estimate.
ZAII costs through 2060.
Initial Estimates
Construction
NCDOT first estimated the construction cost of the PSBC in 2003 to be $260,000,000 (January 16, 2003
estimate). NCDOT assumed the following in developing the construction cost estimate:
• The low-rise portion of the bridge (non-navigation zone) was priced at a unit cost of $55/ftZ for
sections constructed from a barge and $60/ftZfor sections constructed from a temporary work
bridge. This unit price was based on recent (as of 2003) NCDOT contracts issued for projects
that involved long bridges, including the Chowan River project and the Virginia Dare Memorial
Bridge project, both of which had unit costs ranging $SO-$55 per square foot of structure. The
estimates assumed that work bridges would be required within the areas of Pamlico Sound that
contain SAV or SAV habitat, most likely at each end of the PSBC; outside of those areas, NCDOT
assumed that construction from a barge could be used.
• The high-rise portion of the bridge (navigation area) was priced at $180/ftZ.
• The total length of the project, according to the estimate, was 17.1 miles. Approximately 3.2
miles of the project (the northern and southern approaches) would be constructed from a work
bridge; the work bridge itself was priced at a cost of $25/ftZ. The remainder of the bridge would
be constructed from barges.
• The width of the bridge deck was 36 feet, allowing for two 12-foot travel lanes and two 6-foot
shoulders.
• A construction contract time of 4 years.
NCDOT later revised the construction cost estimate for the PSBC to account for the two Rodanthe
terminus alternatives within the corridor; the estimated cost was updated to $294,300,000 for the
Curved Rodanthe Terminus option and $292,600,000 for the Intersection Rodanthe Terminus option
(October 17, 2003 estimate). The only assumptions that changed from the previous estimate were an
increase in bridge length to 17.5 miles (with an additional 0.7-1.0 miles of roadway approach work) and
a 4-foot increase in the total width of the bridge deck (to account for 8-foot shoulders on both sides of
the bridge).
Operations and Maintenance
As of 2003, NCDOT had not yet estimated the operations and maintenance costs of the PSBC.
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REPORT DATE: 10/24/2012
Right of Way
NCDOT would be required to purchase the properties in Rodanthe that would be impacted by either of
the Rodanthe terminus options for the PSBC. NCDOT's initial estimates of the right-of-way acquisition
cost for the PSBC included $5,061,000 for the Curved Rodanthe Terminus option and $2,102,000 for the
Intersection Rodanthe Terminus option (October 2, 2003 estimate).
2005 Supplemental Draft Environmental Impact Statement (SDEIS)
The following table summarizes the PSBC estimates presented in the 2005 SDEIS.
Table 2. 2005 ESTIMATED COSTS OF PAMLICO SOUND BRIDGE- SDEIS
Cost Estimates
Construction
Alternative
Curved Rodanthe Terminus
$416.8 million
Operation /
Maintenance1
Right-of-Way
veloped through the year 2060.
Construction
$1.2 million
. :•� ���
Intersection Rodanthe
Terminus
$414.2 million
$900,000
$5,245,000
NCDOT updated the construction cost estimates of both PSBC alternatives prior to the publication of the
SDEIS in September 2005; the construction cost for the Curved Rodanthe Terminus option was
estimated at $416,800,000 while the Intersection Rodanthe Terminus option was estimated at
$414,200,000 (March 22, 2005 estimate). The 2005 estimates were generated by updating the October
2003 estimate to account for inflation only; NCDOT did not conduct any further review of the unit prices
included in the estimate.
The inflation adjustment resulted in the following changes to the unit prices:
■ $55/ftZ increased to $89/ftz for low-rise portion constructed from a barge;
■ $60/ftZ increased to $97/ftz for low-rise work portion constructed from a work bridge; and
■ $180/ftZ increased to $292/ftZ for segmental high-rise construction (navigation section).
Because the purpose of the 2005 estimate was only an adjustment for inflation, there were no changes
made to the design or construction assumptions included in the estimate.
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REPORT DATE: 10/24/2012
Operations and Maintenance
NCDOT first estimated the operations and maintenance costs for the PSBC over the project's SO-year
design life in 2005; the operations and maintenance costs were estimated to be between $900,000 and
$1,200,000, depending upon the Rodanthe terminus option.
Right of Way
NCDOT updated its right-of-way cost estimates for the PSBC in 2005; the new estimates account for
changes in the number of residences and land values since the 2003 estimate. The estimated costs were
$5,245,000 for the Intersection Rodanthe Terminus option and $6,890,000 for the Curved Rodanthe
Terminus option (July 21, 2005 estimatej.
2007 Supplement to the 2005 SDEIS (SSDEIS)
The following table summarizes the PSBC estimates presented in the 2007 SSDEIS. The SSDEIS
construction costs are based on an estimate originally developed in September 2006 and updated in
February 2007.
Table 3. ESTIMATED COSTS OF PAMLICO SOUND BRIDGE- SSDEIS
Alternative
Cost Estimates Intersection Rodanthe
Curved Rodanthe Terminus
Terminus
Construction $933.5 million $1.4 billion $929.1 million $1.4 billion
Operation /
Maintenance1
Right-of-Way
veloped through the year 2060.
Construction
$356.4 million
. :•� ���
$356.1 million
$5,245,000
Several months prior to issuance of the SSDEIS, NCDOT determined that the construction cost estimates
were in need of further revision and refinement. The department's updated preliminary construction
cost estimates ranged from $916,500,000 to $1,397,500,000 for the Curved Rodanthe Terminus option
and $913,100,000 to $1,392,100,000 for the Intersection Rodanthe Terminus option (September 13,
2006 estimate).
The September 2006 estimate reflected several revisions and changed assumptions from the SDEIS
estimate. The department re-evaluated the unit prices used on the estimates for all of the alternatives
for Project B-2500 largely based on feedback from both the contracting and consulting industry
representatives who attended the Bonner Bridge Constructability Workshop in August 2006 as well as
data on continuing inflationary pressure. Assumptions made in 2005 that related to economies of scale
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REPORT DATE: 10/24/2012
were determined to be invalid and eliminated from the estimate. Additionally, NCDOT determined that
the PSBC would be constructed under a Design-Build contract (as opposed to traditional Design-Bid-
Build project delivery method) due to the project's scope and unique construction challenges. The
estimate was revised to include inflation factors traditionally associated with Design-Build contracts,
including inflation for all preconstruction activities that will be included in the contract and a 10% risk
and additional inflation in prices that would occur between contract award and the acquisition of
permits and commencement of construction.
The September 2006 estimate also includes, for the first time, a"low" and "high" estimate to account
for the amount of segmental bridge superstructure that a contractor may opt to use in construction of a
bridge in the PSBC. Previous estimates had only accounted for segmental construction in the navigation
section of the PSBC, but contractors may opt to use segmental bridge girders for a higher percentage of
the bridge in order to streamline construction of the bridge. Using a cost range was also designed to
help the department account for other variables that influence construction costs; these variables are
summarized in Section 2.3.1.1 of the SSDEIS.
NCDOT made the following revisions to the unit prices in the September 2006 "low" estimate (as
compared to the SDEIS estimate):
■ $89/ftZ adjusted to $140/ftZ for low-rise conventional work from a barge;
■ $97/ftZ adjusted to $130/ftZ for low-rise conventional work from a work bridge;
■ $292/ftZ for segmental high-rise (navigation) construction adjusted downward to $252/ftZ to be
consistent with other segmental bridge construction contracts;
■ $25/ftZ for the work bridge adjusted to $30/ftZ.
The following revisions to the unit prices were made to the "high" estimate:
■ $89/ftZ adjusted to $220/ftZ for low-rise work from the barge;
■ $97/ftZ adjusted to $210/ftZ for low-rise work from the work bridge.
The September 2006 estimate did not reflect any changes to the design of the PSBC alternatives.
NCDOT revised the estimates in February 2007 prior to the publication of the SSDEIS (February 12, 2007
estimate); the SSDEIS then presented these revised high and low construction cost estimates. For the
Curved Rodanthe Terminus alternative, the total construction cost estimate ranged from a low of $933.5
million to a high of $1.4 billion. For the Intersection Rodanthe Terminus, the total construction cost
estimate ranged from a low of $929.1 million to a high of $1.4 billion. The final SSDEIS estimate included
costs for vehicle "turnout" areas that were recommended during the 2006 safety analysis of comparable
long bridges. Vehicle "turnout" areas have a wider shoulder section for use by emergency vehicles and
others in accident situations and are intended to minimize traffic disruption. A turnout was added for
each 3-3.5 mile section of bridge for both the PSBC and all other project alternatives at a cost of
$10,080,000 each.
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REPORT DATE: 10/24/2012
Operations and Maintenance
NCDOT updated the road and bridge operations and maintenance cost estimate for the PSBC in 2006;
the estimate included costs for recommended traffic operations equipment as well as annual
maintenance of the roadway approach sections and the bridge structure. The operations and
maintenance estimate for the Curved Rodanthe Terminus option was $356.4 million; the Intersection
Rodanthe Terminus option was priced at $356.1 million. The increase in operations and maintenance
costs was primarily due to the substantial increase in the estimates for maintenance of the bridge itself;
the department realized that the previous estimates did not adequately account for the amount of time
and effort needed to inspect and maintain a 17.5-mile structure. The revised estimates were developed
on a unit (per-mile) cost in order to account for the length of the structure and included both the annual
inspection and maintenance of the structure as well as a one-time major rehabilitation of the bridge
during the 50-year project life.
Right of Way
The right-of-way cost estimates for the PSBC were not updated for the SSDEIS.
2007 Estimate Verification (Finley Engineering)
Prior to the approval of the SSDEIS, Finley Engineering, a national bridge construction contractor, was
hired to perform an independent preliminary construction cost estimate for both the PSBC and the
Parallel Bridge Corridor alternatives that included bridges. Using the construction material quantities
provided by NCDOT (based on the current design of the PSBC), Finley Engineering generated a new cost
estimate for a bridge in the PSBC (the estimate did not distinguish between the two PSBC alternatives).
Finley used the designs of the new I-10 bridge in Pensacola and the I-10 bridge over Lake Pontchartrain
to generate detailed quantities to augment those provided by NCDOT while also using past industry
experience to determine the most common component types that a contractor would bid for these
types of projects. Finley's cost estimate for the PSBC, at $997 million, was consistent with those
prepared by NCDOT in 2007.
The Federal Highway Administration (FHWA) conducted its own assessment of the NCDOT and Finley
Engineering cost estimates. Staff from FHWA headquarters with expertise in bridge design and
construction reviewed both the NCDOT and Finley Engineering estimates and determined that they
were reasonable, and that they would likely increase over time due to the increase in the cost of
construction materials. The 2007 independent analysis of the construction cost estimates was detailed
in the minutes to the June 20, 2007 Merger Team meeting (minutes dated July 3, 2007).
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REPORT DATE: 10/24/2012
2008 Final Environmental Impact Statement (FEIS)
Because NCDOT typically considers as valid cost estimates that are no greater than two years old, the
construction cost estimates for the Pamlico Sound Bridge Corridor were not updated for the 2008 FEIS.
The construction, operations and maintenance, and right-of-way cost estimates presented in the 2007
SSDEIS remained unchanged and were acceptable for inclusion in the 2008 FEIS.
2009 Revised Final 4(f) Evaluation; 2010 Environmental Assessment; 2010 Record of Decision
In the 2009 Revised Final 4(f) Evaluation, FHWA assessed whether the PSBC could be considered a
"feasible and prudent avoidance alternative" under Section 4(f) of the Department of Transportation Act
of 1966. An "avoidance alternative" is one that avoids the use of 4(f) properties, such as historic sites or
publicly-owned parks, recreation centers, and wildlife refuges, and it "does not cause other severe
problems of a magnitude that substantially outweighs the importance of protecting the Section 4(f)
property" (23 CFR 774.17).
Appendix G of the 2009 Revised Final 4(f) Evaluation details FHWA's decision that the PSBC would not be
a"feasible and prudent avoidance alternative." The core reasons underlying that decision were as
follows: the construction costs of the PSBC would be of extraordinary magnitude in consideration of the
funding available to NCDOT; implementation of the PSBC in a single construction contract would create
a unique maintenance problem of extraordinary magnitude for NCDOT as it would have to defer much
needed improvements on the remainder of the state highway system; and the PSBC would also result in
severe impacts to the ability to access the PINWR. (EA, App. B-159). FHWA used the construction,
operations and maintenance, and right-of-way costs included in the 2008 FEIS in its Revised Final 4(f)
Evaluation.
Based upon the feasible and prudent analysis conducted by FHWA and documented in the 2009 Revised
Final 4(f) Evaluation, FHWA determined that the Pamlico Sound Bridge Corridor was not a feasible and
prudent avoidance alternative, and therefore, would not be carried forward for further detailed study
following the 2009 Revised Evaluation. This decision was further documented in the EA. Based on this
decision, an updated construction cost estimate for the Pamlico Sound Bridge Corridor was not
developed for inclusion in the 2010 Environmental Assessment (EA) or the Record of Decision (ROD).
Bonner Bridge Demolition
The SSDEIS and FEIS included a separate line item cost for the demolition and removal of the existing
Bonner Bridge. This cost was estimated at $4 million (2006 dollars). As discussed in the FEIS, the
demolition cost could vary greatly depending upon the disposal site for the bridge components.
1-7

NCDOT Construction Cost Estimate Process

REPORT DATE: 10/24/2012
NCDOT Construction Cost Estimate Process
General Process
NCDOT employs professional staff to generate periodic construction cost estimates for all of its projects.
The department's process for estimating construction cost is both technical and subjective, based on
professional experience and judgment, with a data analysis that considers anticipated risks and
contingencies.
A project's construction cost depends upon its proposed scope, design, and location. NCDOT first uses
the design of the project to generate a list (including the quantity) of the different types of material or
activity that will be required for construction (clearing and grubbing, bridge deck, pavement markers,
etc.). Unit prices for each line item are then generated based on historical bid data and other statistical
project parameters. The unit cost of each line item accounts for both the price of the materials needed
and for the labor required to perform the task.
Once the subtotal cost for all line items is summed, a percentage of the subtotal is then added to the
estimate to account for contractor mobilization at the project site. Additional contingency factors (a
percentage of the overall cost) are then applied to an estimate to account for future change orders that
may occur due to incorrect quantities or unit costs, the possibility of unknown conditions or events, and
unforeseen project requirements, all of which can vary based on the project's location and scope. The
application of contingency factors allows the department to establish realistic project budgets that
account for potential risks. Table 4 lists potential risk factors of project construction that may need to be
accounted for in a construction cost estimate.
Table 4. Construction Risk Factors
Schedule time (extra cost for expedited Project setting — remoteness, urban or
work, timing restrictions, time of year, rural setting, physical constraints,
A+B bids)
Unknown risks/potential change orders Environmental issues and/or mitigation
needs
Availability of materials Geotechnical issues
Availability of contractors Potential for poor soil conditions
Project size Railroad, utility issues
Traffic control issues
If the department determines that a project should be constructed using the Design-Build delivery
method (the contractor is responsible for both the final design and construction of the project, as
opposed to just the project's construction), an additional contingency factor is included in the
construction cost estimate. The design-build factor accounts for the cost of additional preliminary
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REPORT DATE: 10/24/2012
engineering, environmental analysis, and permitting work that will be required by the contractor prior
to the start of construction. This factor is adjusted for inflation up to the mid-point of the overall
contract to account for any changes that may occur in material prices during that time and depends
upon the anticipated total contract length. The design-build inflation factor is based on bids for other
design-build contracts that NCDOT has received for projects statewide and is updated regularly.
Two methods are generally used to develop construction cost estimates: historical (bid-based)
estimating or cost-based estimating.
Historical (Bid-BasedJ Estimating Process
Historical or bid-based estimating is the most prevalent method practiced by state agencies across the
country.1This method uses data from recently awarded contracts nationwide as a basis to determine
the unit prices for each line item. NCDOT maintains databases with years of historical data for different
project types and locations. An estimator can access the data to adjust a project's unit prices to account
for project site specifics (project scope, location, geography, material quantities and availability,
schedule, market conditions) and potential risks.
Historical or bid-based estimating can utilize a square foot cost approach, a quantities approach, or a
combination of the two. The square foot approach means that an estimate is based on the dimensions
of the project- a square foot unit cost is applied to the area (length multiplied by width) of a bridge or
roadway section. The quantity approach assigns unit costs for each material involved in the operation
(asphalt, pavement markings, etc.). NCDOT typically uses the square foot approach when estimating the
cost of bridge projects. Bridge costs per deck area (usually in dollars per square foot) are derived using
bid data for typical bridge types and span lengths together with location characteristics (over land or
water). Since the cost per square foot of bridge deck area varies based on the type of structure itself,
the department often uses a range of unit costs for the bridge deck.
Cost-Based Estimating
Cost-based estimating requires dividing each project into the individual tasks necessary to complete the
project. A cost estimate is then developed for each task. Each task estimate normally consists of six basic
elements: Time, Equipment, Labor, Material, Overhead and Profit. Since contractors generally utilize a
Cost-Based Estimating approach to prepare bids, this method may provide more accurate costs to
support a contract award or rejection as well as any future price negotiations with the contractor after
contract award. Properly prepared cost-based estimates require significantly more effort, time, and skill
to prepare than historic bid-based estimating. Even agencies that routinely utilize cost-based estimates
typically do so for only those items that comprise the largest dollar value of the project. In order to
successfully implement cost-based estimating, the estimators must have expertise in construction
1"A Practical Guide to Estimating" Prepared by: AASHTO Technical Committee on Cost Estimating, July 9, 2009.
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REPORT DATE: 10/24/2012
methods, including the use of equipment, manpower, material and scheduling. Detailed records of
actual equipment and manpower production rates on past construction contracts are also helpful for
providing data from which to base estimating assumptions for contracts being let.
Pamlico Sound Bridge Corridor Estimates
Major projects such as the PSBC pose challenges (scope, location, availability of materials, haul distance,
etc.) that exceed the historical estimate data available to the department. However, even for a project
of this magnitude, NCDOT still considers the historical or bid-based estimate method as a reasonable
method to provide a preliminary construction cost estimate. NCDOT can, as needed, utilize data from
independent contractors to develop a reasonable construction cost estimate of projects of the
magnitude of the PSBC.
Conventional versus Segmental Bridge Type
The unit price used to estimate the cost of the bridge portion of a project is dependent in part upon the
type of superstructure assumed in the design. The PSBC, as with other bridge alternatives across Oregon
Inlet, could utilize a conventional superstructure, a segmental superstructure, or a combination of the
two.
A conventional superstructure typically includes a series of precast (formed offsite) I-beam girders
(concrete or steel) on top of which the bridge deck is cast. The girders can be mass produced offsite in
order to lower their cost. The deck is then cast in place on top of the girders, forming the superstructure
into a single unit. While this type of superstructure is lower in cost and may be faster to construct, it
may require the use of multiple temporary work bridges or barges to install both the girders and to cast
the deck, potentially increasing the temporary construction impacts to the environment.
A segmental superstructure consists of a concrete hollow box girder, the top of which is the bridge deck
itself. The box segments are precast offsite and must be assembled at the construction site. Because
each box segment must precisely connect with the next, contractors traditionally opt to precast these
segments closer to the actual construction site in order to ensure quality. While more expensive than
conventional girders, segmental spans can be precast at longer lengths than traditional I-beam girders
and are therefore ideal for navigation sections of bridges (the longer span lengths minimize the amount
of bridge substructure that has to be located within the navigable waterway). The use of segmental
bridge sections also allows the contractor to assemble a section of the bridge, then use that section as
the work bridge from which to attach the next box segment. This minimizes, if not eliminates, the need
for work bridges or as many barges in that section.
In its estimates, NCDOT assumed that the section of a bridge in the PSBC that would span the navigable
section of the inlet would be constructed with a segmental superstructure due to the height of the
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REPORT DATE: 10/24/2012
bridge2 and the ability to form longer span lengths with a segmental superstructure. The remainder of
the bridge would be constructed using conventional I-beam girders. A contractor could opt to use a
segmental superstructure for a longer section of the bridge depending upon the method of construction
that the contractor opts to use.
Additional information about the superstructure assumptions for the PSBC can be found in Section 2.9
of the FEIS.
Design-Build Construction
NCDOT constructs projects using one of two project delivery methods: design-bid-build or design-build.
The design-bid-build process, also referred to as a"traditional letting," involves awarding a contract for
the project's construction only after NCDOT completes the final design of the project, receives all
environmental permits, and acquires all right-of-way. By contrast, the design-build method awards a
single construction contract that also includes the project's final design, the preparation of
environmental permit applications, and the determination of the final right-of-way needed for the
project (NCDOT will still acquire the right-of-way). A design-build committee within NCDOT determines
which projects will be constructed using the design-build delivery method. According to the
department's Design-Build Policy and Procedures document (October 2011), a project may considered
for design-build if it falls within at least one of the following categories:
1. "Projects where design and construction need to be expedited for the public good or to
capitalize on advanced or specific funding opportunities.
2. Emergency Projects.
3. Projects with complex constructability or traffic phasing issues.
4. Projects affording opportunities for innovation.
5. Unusual projects that do not lend themselves to normal design-bid-build procedures."
In addition, new location projects, large interstate widening or rehabilitation projects, projects with
heavy traffic volume, and large or unique bridge projects are particularly suited to the design-build
process.
The PSBC, due to its scope and location on two coastal barrier islands, includes construction challenges
and potential for innovation that would best be served through the design-build delivery method.
Therefore, the PSBC would be constructed through the design-build process. NCDOT began including a
design-build escalation factor in its construction cost estimates for the PSBC and other alternatives for
project B-2500 in 2006, during the time that NCDOT was developing its design-build program.
2 The U.S. Army Corps of Engineers has required that the portion of the bridge over the navigable waters within
Oregon Inlet provide at least 70 feet of clearance above the mean high water line.
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Post-Record of Decision Construction Cost Estimates

REPORT DATE: 10/24/2012
Post-Record of Decision Construction Cost Estimates
Following the approval of the December 20, 2010 Record of Decision (ROD), NCDOT updated the
construction cost estimates for the Pamlico Sound Bridge Corridor (PSBC) in part to address agency
concerns on the implementation of Phase II of STIP Project B-2500. The post-ROD estimate process
included an independent verification process similar to that conducted by Finley Engineering in 2007.
November 2011 Estimate
Table 5 summarizes the construction cost estimate that NCDOT developed in November 2011. A"low"
and "high" cost for each alternative was prepared, consistent with previous estimates for the PSBC.
Table 5. 2011 PSBC Construction Cost Estimate
Alternative
Cost Estimates Curved Rodanthe Intersection Rodanthe
Terminus Terminus
Construction $573 million $629 million $569 million $625 million
NCDOT generated the new cost estimate for the PSBC by updating the unit prices in the SSDEIS
construction cost estimate, which was completed in February 2007. The square-foot bridge unit cost,
other material unit costs, and the contingency and design-build factors were updated based on inflation
and the most recent historical bid prices on other design-build projects. No changes were made to the
design of the PSBC alternatives for the purposes of this estimate.
In the SSDEIS estimate, NCDOT assumed two sets of unit structure prices to determine the "high" and
"low" construction costs of the PSBC, in part to allow for the use of segmental bridge construction
outside of the high-rise navigation section. For the 2011 estimate, only one set of unit structure prices
was used. The "high" and "low" estimate was developed instead by varying the preliminary engineering
and risk inflation factors that are applied to all design-build estimates; this method of determining the
cost estimate range was supported by design-build project bids that NCDOT received since 2007. As a
result, the revised 2011 estimate reflected the following changes to unit prices and inflation factors:
• Due to the economic downturn that began in 2008, the unit square-foot bridge costs dropped
an average of 25% from those used in the SSDEIS "low" estimate. The unit cost for low-rise
construction from a barge decreased from $140/ftz to $100/ftZ, while the unit cost for low-rise
construction from a work bridge decreased from $130/ftZ to $95/ftZ. The segmental, high-rise
(navigation) construction unit cost dropped from $252/ftZ to $180/ftZ. The changes in unit prices
are illustrated by the Construction Cost Index (Appendix A).
• In previous design-build construction cost estimates, NCDOT listed a separate escalation factor
to account for the escalation of material costs through the mid-point of construction. However,
design-build project bids did not support the use of a separate escalation factor for this risk.
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REPORT DATE: 10/24/2012
Instead, escalating costs were considered to be included in the high/low risk factors typically
assigned design-build projects, and the separate line item for cost escalation to mid-
construction was eliminated. For the "low" estimate, a S% preliminary engineering cost and a
5% risk factor were included in the estimate; the "high" estimate includes a 10% preliminary
engineering cost and 10% risk factor.
The estimate does not account for the following design considerations:
• A Corrosion Protection Plan was not accounted for in this estimate. The Corrosion Protection
Plan, stipulated in the B-2500 Phase I Final Request for Proposals (RFP) (see p. 59) prescribes the
minimum corrosion protection measures to be used on this project with the intent to provide a
minimum 100 year service life. This plan was not accounted for in this estimate and could add as
much as 10% to the total cost.
• Also, while cast-in-place deck slabs as primary structural members, precast girders with an
integrally cast deck and/or voided slabs (cored slabs or box beams), were not allowed in the
B-2500 Final RFP, no ruling had been made at the time concerning the Pamlico Sound Corridor
Bridge (outside the Oregon inlet area), and contributed to the low range unit costs. The use of
cored slabs could reduce the unit structure cost to approximately $80-85/ftZ.
• Some economy of scale and savings through innovation (similar to the use of the building gantry
system that was developed for the Washington Bypass bridge project) were also anticipated for
a 17.5-mile long bridge. The estimate was lowered approximately 5% to account for potential
innovation.
The November 2011 estimate (Appendix B) priced the construction of the Curved Rodanthe Terminus
Option at $573 million -$629 million and the Intersection Rodanthe Terminus option at $569 million -
$625 million. These new costs were between 39% and 55% lower than those developed for the SSDEIS.
Because of the magnitude of the price decrease and the scope of the PSBC, NCDOT conducted another
independent review of the construction cost estimates.
2012 Estimate Verification
NCDOT selected three consulting firms with experience in bridge replacement and design-build projects
to provide new construction cost estimates for the PSBC. The three firms —AECOM Technical Services of
NC, Michael Baker Engineering, and Armeni Consulting Services — have extensive experience estimating
major bridge construction projects. Each firm was asked to provide two cost-based construction
estimates: the first was a simple update of the 2007 Finley Engineering estimate to account for current
unit prices; the second was a more detailed update of the Finley Engineering effort to include changes in
design and construction requirements (based on the B-2500 Phase I Final RFP) that were not included in
the original estimate.
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REPORT DATE: 10/24/2012
Because the focus of this assessment was on the 17.5 miles of bridge within the PSBC, the firms did not
distinguish between the two Rodanthe terminus options within the corridor. Instead, each firm provided
a single estimate for the PSBC itself.
Task 1
NCDOT first asked each of the three firms to update the 2007 Finley Engineering estimate only to
account for inflation and other changes in unit construction quantity prices. To complete the first
construction cost estimate, NCDOT provided each of the three teams with the following information:
• The 2007 Finley Engineering construction cost estimate;
• The original Scope of Services for the Finley Engineering estimate;
• A summary of the construction quantity assumptions made by Finley Engineering in developing
its estimate;
• The preliminary design (structure plans) of the Parallel Bridge (Phase I); and
• A copy of all transmittal correspondence between NCDOT and Finley Engineering.
In addition, each firm was provided with copies of the B-2500 2008 Final Environmental Impact
Statement for additional detail on the PSBC. The firms were not provided copies of any detailed NCDOT
construction cost estimates for the project.
The firms were instructed to update each unit price to current (2012) dollars and to use the new unit
prices and construction quantities to develop a new cost estimate. Each firm was to note any potential
concerns with the quantity information provided and to estimate an additional design-build inflation
factor that would incorporate additional cost due to preliminary engineering work, risk, and the
construction schedule/ delivery method. The firms were instructed not to revise the preliminary design
of the PSBC or to otherwise make any changes in the design assumptions for the purposes of this
estimate.
Task 2
NCDOT then asked each firm to submit a new estimate for the PSBC; this estimate should account for
changes in design standards, department design requirements, and any design changes that the firm
may recommend in 2012 that may not have been in place at the time of the 2007 Finley Engineering
estimate. The unit costs associated with each quantity should be adjusted accordingly. While the firms
were asked to specify these design recommendations, they were not allowed to prepare any new
designs for the PSBC.
The firms were asked to account for costs of the following items in their estimates:
• A corrosion protection plan consistent with that included in the B-2500 Phase I RFP-Structures
Scope of Work; the intent of this plan was to provide a minimum 100 year bridge service life;
• A revised navigation (high-rise) zone as found in the B-2500 Phase I Final RFP;
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REPORT DATE: 10/24/2012
• A fishing pier, as stipulated in the B-2500 Phase I Final RFP. Each firm could opt to use a portion
of the existing Bonner Bridge for this fishing pier, or construct a new pier;
• A new structure that combined the use of conventional and segmental construction, as was
used in the winning bid for B-2500 Phase I. The Finley Engineering estimate assumed entirely
segmental construction;
• The latest foundation assumptions. The firms could opt to use the Finley Engineering estimate
for all segmental construction, or the winning Phase I bid for a combination of
conventional/segmental construction. Additional foundation recommendations were provided
by NCDOT's Geotechnical Engineering Unit;
• The use of dredging for up to 8 miles of the 17.5-mile alternative (as stated in the FEIS);
• Finley Engineering's estimate for the inclusion of conduit for ITS and telephone lines on the new
structure. Separate utility relocation costs were not required;
• Based on a review of the B-2500 Phase I Final RFP, the winning bid design, and engineering
technical memorandums prepared during the planning process, include any other possible
major cost-inducing factors that may need to be added to the scope of work that are not
included in the Finley Engineering estimate; and
• Any effect of the Davis-Bacon Act, which mandates that contractors and subcontractors working
on federally funded or assisted contracts pay their laborers and mechanics no less than the
locally prevailing wages and benefits for corresponding work on similar projects in the area .
Results
A summary of the estimates from each of the three firms is included in Table 6.
Table 6. Summary of 2012 Contractor Estimates
Firm Task 1 Task 2
AECOM $699,968,092 $1,068,068,482
Armeni $749,868,482 $1,017,719,740
Baker $809,258,154 $1,024,832,643
A detailed summary of each firm's estimates for Task 1 is in Appendix C and Task 2 is included in
Appendix D.
The Task 1 estimates, while higher than that developed by NCDOT in November 2011, were lower than
that developed by Finley Engineering in 2007. The lower estimates are likely due to the impacts of
inflation on construction materials prices, which in large part have decreased due to the impacts of the
global recession. However, the Task 1 estimate likely underestimates the true construction cost of the
PSBC, as it does not account for design assumptions and requirements that have changed since 2007.
The estimates prepared under Task 2 are within the range of those used in the SSDEIS in 2007 and FEIS
in 2008. The validity of the Task 2 estimates is further supported by the fact that they reflect the design
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REPORT DATE: 10/24/2012
requirements included in the B-2500 Phase I contract. They reflect a combination of conventional and
segmental bridge construction, which is consistent with the winning bid for B-2500 Phase I. The high
range of the SSDEIS estimate reflected entirely segmental construction, which is done at a higher cost
than conventional construction.
June 2012 Estimate
NCDOT utilized the estimates from AECOM, Armeni, and Baker to develop a new construction cost
estimate for the PSBC. NCDOT used a blend of the unit costs in each estimate to develop a new bid-
based construction cost estimate. Each of the unit structure costs used in the NCDOT estimate were an
average of four estimates, including those from the three firms and the winning design-build team for
Phase I of the project. The unit structure prices were revised from the November 2011 estimate to the
following:
• Low-rise construction from a barge was raised from $100/ftZ to $130/ftZ;
• Low-rise construction from a work bridge was raised from $95/ftZ to $125/ftZ; and
• High-rise (navigation section) construction was raised from $180/ftZ to $375/ftZ.
In addition, the separate escalation factor for design-build projects that had been removed from the
November 2011 estimate was again included based on input from the three firms. Each firm
independently pointed out that while this cost escalation may not exist on other design-build projects
across the state, the construction of the PSBC is anticipated to exceed the typical two-year construction
period of other design-build projects; therefore, a cost escalation to the mid-point of construction
should be included. NCDOT included a 3% per year escalation to account for the time between 2012 and
the mid-point of actual construction; this escalation accounts for the time needed to revise any planning
documents in order to account for the PSBC (2 years), time needed to complete the final design and to
acquire permits and right-of-way (1.5 years), and the first half of project construction (2.5 years). This
additional design-build escalation was included only in the "high" estimate for the PSBC alternatives.
The "low" estimate included only the preliminary engineering and risk factors that were assumed
appropriate for design-build projects in the November 2011 estimate.
The revised cost estimates developed in June 2012 are listed in Table 7 and are included in Appendix E.
Table 7. 2012 PSBC Construction Cost Estimate
Alternative
Cost Estimates Curved Rodanthe Intersection Rodanthe
Terminus Terminus
Construction $878 million $1.15 billion $876 million $1.146 billion
The construction cost of the PSBC decreased between 6% (low estimate) and 18% (high estimate) since
the cost was last published in the 2008 FEIS. By comparison, the winning bid on B-2500 Phase I was $216
million, approximately 18% lower than the low Phase I estimate reported in the 2010 EA ($265 million).
The highest bid received for B-2500 Phase I was $307 million, approximately 3% lower than the high
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REPORT DATE: 10/24/2012
Phase I estimate reported in the EA ($315 million). Therefore, the observed cost differences between
the 2008 FEIS and the June 2012 estimates are credible based on the bids received in 2011 for Phase I of
the project.
This estimate is only for the final design and actual construction of the PSBC; it does not include removal
of the existing Bonner Bridge, new right-of-way within Rodanthe, or the installation of any traffic
operations equipment that may be required for the new bridge. The cost also does not include future
maintenance of the bridge.
Bonner Bridge Demolition
The demolition and removal of the existing Bonner Bridge was not included in the construction cost
estimates for the PSBC. However, each of the three independent contractors (AECOM, Armeni, and
Baker) provided an estimate for the demolition of the bridge; the estimates from the three firms range
between $9,687,528 and $11,924,550. In addition, the design-build team that was awarded the B-2500
Phase I contract estimated $8,531,090 for demolition and removal of the existing bridge, not including
the approximate 1,000-foot section at the southern end that will be retained as a fishing pier.
Based on these estimates, NCDOT has assumed a$10 million cost for demolition and removal of the
existing Bonner Bridge.
3-6

Operations and Maintenance Cost Estimates

REPORT DATE: 10/24/2012
Operations and Maintenance Cost Estimates
As previously discussed, NCDOT last developed estimates for the operations and maintenance costs
associated with all of the detailed study alternatives for STIP Project B-2500, including the Pamlico
Sound Bridge Corridor (PSBC), in preparation of the SSDEIS. These estimates included those costs
associated with:
• Bridge operations, specifically those for the installation and maintenance of equipment to
monitor traffic and weather conditions on the new facility;
• Maintenance of the existing roadway during construction and of the new roadway sections
following project completion; and
• Maintenance, inspection, and rehabilitation costs associated with new bridges.
The purpose of this section is to review the SSDEIS analysis of the operations and maintenance costs
associated with the PSBC and to update those assumptions and costs to 2012 standards. All of the
estimates discussed herein assume that construction of the PSBC began in 2009 and was completed in
2012 (four full years of construction); all recurring operations and maintenance costs were estimated
through 2060.
The original SSDEIS analysis included additional estimates for potential public costs associated with the
PSBC, including alternate Refuge access, removal of the terminal groin, and other items. Those public
costs are not assessed here.
Operations
In the SSDEIS analysis, NCDOT proposed the use of several types of Intelligent Transportation Systems
(ITS) that would assist in monitoring traffic and weather conditions on the bridge. These systems are
intended to address safety concerns associated with all of the bridging alternatives by allowing NCDOT
to identify traffic and weather conditions that could disrupt travel conditions on the bridge. These
systems are similar to those used on long bridges in other parts of the country.
For the PSBC, NCDOT recommended the inclusion of closed circuit television cameras, overhead
dynamic message signs, highway advisory radio, wind speed sensors, incident management patrols,
portable traffic signals, and 511 traveler information signs. The SSDEIS estimate prepared by NCDOT's
Transportation Mobility and Safety Unit estimated that the initial installation cost of these systems to be
$5.275 million, with an additional annual maintenance cost of $596,472 (2006 dollars).
NCDOT updated this estimate in 2012; the total initial installation cost was revised to $5.085 million,
with a revised annual maintenance cost of $551,140. There were no changes made to the amount or
type of recommended operations equipment.
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REPORT DATE: 10/24/2012
Roadway Maintenance
Though the PSBC is primarily a bridging alternative, it does include roadway sections at both ends of the
project, including the connection to existing NC 12 within Rodanthe. These roadway sections would
require regular annual maintenance and additional pavement rehabilitation, both of which should be
considered as part of the maintenance cost of the project. In addition to the new roadway sections,
NCDOT also estimated the cost of maintaining the current NC 12 roadway prior to the completion of
construction of the PSBC. The estimate of the current roadway maintenance included costs for repairing
the roadway following storm events. The estimated roadway maintenance cost for both the existing and
future roadway was estimated on a per-mile basis and is based on historical roadway maintenance
efforts on existing NC 12.
The SSDEIS maintenance estimate developed in 2006 includes the following assumptions:
• Construction of the PSBC would last four years, during which maintenance of the existing
NC 12 roadway would be required. Regular maintenance of the 12.9 mile section of existing
roadway at $10,000 per mile would cost $129,000 annually.
• An additional storm-related maintenance cost of $553,000 per year was added to this total.
No storm-related roadway maintenance costs were included for the PSBC once construction
was completed.
• Once construction of the PSBC was complete, the new roadway (0.37 miles for the Curved
Rodanthe Terminus option, 0.12 miles for the Intersection Rodanthe Terminus option)
would also require annual maintenance at $10,000 per mile, with an additional pavement
rehabilitation (resurfacing) every 12 years at a cost of $150,000 per mil.
Using these assumptions, the SSDEIS roadway maintenance cost estimate (all costs through 2060) was
$3,130,800.
NCDOT reviewed these roadway maintenance assumptions and estimates in 2012 and determined that
no changes to the roadway maintenance estimates were required.
Bridge Maintenance
NCDOT requires that all bridges undergo inspection and maintenance on an annual basis. Depending
upon their size and location, bridges also may require a major rehabilitation at least once during their
estimated life. For the PSBC, NCDOT developed an annual maintenance and inspection cost as well as an
estimate for one major rehabilitation during the project's SO-year design life. Each of these costs is
based on the square foot area of the bridge.
For the SSDEIS, NCDOT's Structures Management Unit estimated a cost of $1.6 million for annual bridge
inspections, with an additional $3.3 million required for annual maintenance. In addition, NCDOT
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REPORT DATE: 10/24/2012
estimated that $76.7 million would be required for one major rehabilitation of the bridge during the
project's design life. This estimate assumed segmental construction of the bridge.
NCDOT reviewed these bridge maintenance assumptions and estimates in 2012 and determined the
following changes (to account for inflation since the SSDEIS estimate):
• The annual bridge inspection cost should be increased to $1.8 million;
• The annual maintenance cost should be increased to $3.5 million; and
• The estimated cost for one rehabilitation increased to $84 million.
Conclusions
Table 8 summarizes the total operations and maintenance costs for each of the alternatives within the
PSBC.
Table 8. PSBC Operations and Maintenance Costs
Curved Rodanthe Intersection Rodanthe
Item
Terminus Terminus
Annual Roadway Maintenance $696,800 $576,800
Pavement Rehabilitation (resurfacing) $222,000 $72,000
Operations Equipment- Initial Installation $9,945,000 $9,945,000
and Periodic Replacement
Operations Equipment- Annual $26,454,720 $26,454,720
Maintenance
Storm-Related NC 12 Maintenance (during $2,212,000 $2,212,000
bridge construction)
Bridge Inspection, Maintenance, 1 Bridge $339,461,337.60 $339,461,337.60
Rehabilitation
Total $378,991,857.60 $378,721,857.60
The bridge maintenance, inspection, and rehabilitation costs of the PSBC are the most significant portion
of the PSBC Operations and Maintenance costs; they are estimated at 90% of the total operations and
maintenance cost of the PSBC.
4-3

Project Finance Options and Analysis

REPORT DATE: 10/24/2012
Project Finance Options and Analysis
Once the construction, operations, and maintenance cost estimates for the Pamlico Sound Bridge
Corridor (PSBC) had been updated, NCDOT next analyzed the impacts of the PSBC on the department's
projected budget. This section includes a review of the anticipated available federal and state funding
sources and a determination of whether the PSBC could be funded, based on what is known today about
available revenues.
Highway Program Funding Sources
NCDOT's State Fiscal Year (SFY) 2011-12 transportation program budget, excluding turnpike financing,
was comprised of three major funding sources: 28% of the total funding from designated Federal Funds;
25% from the North Carolina Highway Trust Fund; 46% of the total funding from the North Carolina
Highway Fund; and 1% from othervarious resources.
Figure 1. NCDOTTransportation Program Funding Sources
�
1/ ■ North Carolina
�� Highway Fund
28% ■ North Carolina
46% Highway Trust Fund
25%
Federal Funds
■ Other
These general categories of funding are described in more detail below.
Federal Programs1
Federal funds include federal highway dollars, general fund dollars, and other funds that go towards
transit, rail, and airport projects. There are several programs or sources through which federal funding is
available: Interstate Maintenance, which makes up 12% of federal funds; the National Highway System
(NHS), which makes up 25% of federal funding; the Surface Transportation Program, which makes up
30% of federal funding; and the Bridge Program, which makes up 16% of federal funding. Some of the
other programs include the Appalachian Development Highways (4%), Congestion Mitigation and Air
Quality (3%), and the Highway Safety Improvement Plan (3%).
1 Programs are those available prior to the implementation of MAP-21, which is discussed later in this section.
5-1

REPORT DATE: 10/24/2012
Interstate Maintenance (IM)
These funds are restricted for use on existing Interstate facilities. STIP Project B-2500 is not eligible for
this funding source because it is not classified as an interstate.
Appalachian Development Hi�hways (APD)
APD funds are restricted to use for the construction, reconstruction, or improvement of highways on the
designated Appalachian Development Highway System (ADHS). These highways are located in the
Appalachian Region. STIP Project B-2500 is not eligible for this funding source because it is not a part of
the ADHS.
Brid�e Pro�ram (BR)
These funds are used for projects that have been programmed primarily based on a Bridge Maintenance
statewide structure condition priority listing. Where operational problems exist, NCDOT may adjust the
priorities. STIP Project B-2500 is eligible for this funding source.
National Hi�hway System (NHS)
Funds are restricted for projects that are a part of the NHS. Types of eligible work on the NHS include:
construction, reconstruction, resurfacing, restoration, and rehabilitation of segments of the NHS;
operational improvements for segments of the NHS; highway safety improvements for segments of the
NHS; and other activities as defined by federal regulations. STIP Project B-2500 is eligible for this
funding source.
Con�estion, Miti�ation and Air Quality (CMAQ)
Funding is allocated to air quality (AQ) non-attainment and maintenance areas based on AQfactors and
population. Non-attainment areas are those areas that do not or previously have not met air quality
standards for ozone, carbon monoxide, particulate matter, and nitrogen dioxide. STIP Project B-2500 is
not eligible for this funding source.
Surface Transportation Pro�ram (STP)
The STP program has many sub-categories each with different rules. The major sub-categories are
Enhancements (funds restricted to transportation enhancement activity); Urban/Direct Attributable
(funds restricted to urbanized areas); and Non-Urban/Any Area (fund allocation subject to
prioritization). STIP Project B-2500 is not eligible for funds in the Enhancement or Urban/Direct
Attributable categories; however, it is eligible for Non-Urban/Any Area funding.
Highway Safety Improvement Pro�ram (HSIP)
HSIP funds may be used to carry out highway safety improvement projects on any public road or publicly
owned bicycle or pedestrian pathway or trail. Programming decisions are made based on benefit/cost
analyses which consider accident history and statewide exposure indices. STIP Project B-2500 is not
eligible for this funding source.
5-2

REPORT DATE: 10/24/2012
Equity Bonus (EB)
The Equity Bonus ensures that each state receives a specific share of the aggregate funding for major
highway programs. Every state is guaranteed at least a specified percentage of that State's share of
contributions to the Highway Account of the Highway Trust Fund. STIP Project B-2500 is eligible for this
funding source.
Hi�h Priority Prolects (HP)
Funds are restricted to specific projects identified in federal transportation bills. Programming decisions
are made by the U.S. Congress. STIP Project B-2500 is not eligible for this funding source.
State Programs
North Carolina Hi�hway Trust Fund
There are three major programs under the North Carolina Highway Trust Fund (N.C. Gen. Stat. Chap.
136, Art. 14): the Intrastate Highway System, Urban Loops, and the Mobility Fund (N.C. Gen. Stat. §136-
187). Monies are restricted to projects specifically designated by the North Carolina Legislature.
STIP Project B-2500 is eligible for federal-aid matching funds under the Highway Trust Fund program;
however, the Highway Trust Fund can only be used for the matching funds that the State must pay on
any federally funded project (usually 20% of the project's total cost). The State Legislature determined in
2003 that this was an appropriate use of the Highway Trust Fund.
North Carolina Hi�hway Fund
The Highway Fund is made up of funding from state gas tax, motor vehicle registration fees, and title
fees. These funds are for use on highway construction and maintenance, the State Highway Patrol, the
Division of Motor Vehicles, public transportation, and rail programs. The State Legislature determines
how the Highway Fund is used, including which construction projects can use monies from the fund.
The construction of STIP Project B-2500 has no funding appropriation from this funding source.
However, the future maintenance of the new facility constructed under B-2500 would use monies from
the Highway Fund.
State Transportation Improvement Plan — Programming
The State Transportation Improvement Program (STIP) as described in N.C. Gen. Stat. § 1436-350(f)(4), is
a schedule — approved by the NCDOT Board of Transportation — of all major transportation
improvement projects and their anticipated cost for a period of l years into the future. It places
projects in order according to priority, indicating when the right-of-way acquisition and construction
phases of a project are slated to begin and the cost of each phase. STIP Project B-2500 was originally
included on the STIP in the late 1980s, once NCDOT identified the current Bonner Bridge as a structure
that needed to be replaced. At the time, the project was identified through a statewide bridge project
prioritization process, which rated potential bridge replacement projects using a number of factors
including the age of the structure, its current condition, and its life expectancy. Since the original
5-3

REPORT DATE: 10/24/2012
identification of STIP Project B-2500, the Bonner Bridge has continued to deteriorate despite continual
maintenance efforts; therefore, it is still included on the STIP.
The amount of money available for any given STIP cycle is estimated based on an annual reassessment
of available federal and state revenues. Based on revenues received to date and the constraints
attached to each federal and state funding source, the department forecasts how much revenue will
likely be available for the next ten years. This is a consensus forecast developed in conjunction with the
North Carolina Office of State Budget and Management.
Based upon the amount of revenue projected to be available to the department for STIP construction
projects, NCDOT estimates that $8.327 billion will be available to NCDOT for the years 2014-2020, the
next STIP cycle. However, this amount is a draft projection and is subject to change based on actual
collected revenues. The proposed STIP will be out for public review and comment for approximately
eight months. The Board of Transportation will be asked to approve the 2014— 2020 STIP in the
Summer of 2013.
Equity Formula
Once the total amount of funds available for the entire STIP has been determined, the state's Equity
Formula is used to determine how much money is available within each of the department's 14
transportation divisions. The Equity Formula was created in 1989 by the General Assembly (N.C. Gen.
Stat. § 136-17.2A). It requires that STIP funds be distributed equitably among regions of the State. The
14 divisions of NCDOT are organized into 7 Distribution Regions. Monetary distribution is based 50
percent on the population of a region, 25 percent on the number of miles of intrastate highways left to
complete in a region, and the remaining 25 percent is distributed equally among the regions for the
STIP. Federal Congestion Mitigation, Air Quality improvement program funds, Urban Loop funds, and
competitive and discretionary federal grants are exempt from the Equity Formula.
STIP Project B-2500 is in Dare County, North Carolina, which is part of NCDOT Division 1(see Figure 2).
Division 1 includes the following additional counties: Bertie, Camden, Chowan, Currituck, Gates,
Hertford, Hyde, Martin, Northampton, Pasquotank, Perquimans, Tyrrell, and Washington. Under N.C.
Gen. Stat. § 136-17.2, Distribution Region A is comprised of the counties of both Division 1 and Division
4. Division 4 includes Edgecombe, Halifax, Johnston, Nash, Wayne, and Wilson counties.
5-4

REPORT DATE: 10/24/2012
Figure 2. NCDOTTransportation Divisions
Based on the Equity Formula calculation (N.C. Gen. Stat. §136-17.2A) at this time (September 2012),
NCDOT anticipates that Division 1 will be allocated $642,000,000 for right-of-way acquisition and
construction in the STIP covering years 2014 through 2020. In addition, equity adjustment calculations
are performed to ensure that each Division has received its share of equity funds since year 2000 (N.C.
Gen. Stat. 136-17.2A(h)). Based on this calculation, it is anticipated that an additional $311,000,000 may
be allocated to Division 1 for the years 2014 through 2020. This additional funding is available when
projects are delayed within a Division and the funding is not shifted to other projects. Therefore, the
total allocation to Division 1 for the seven-year period is estimated to be $953,000,000. Table 9
summarizes the funding available to each transportation Division for 2014-2020.
Table 9. Draft 2014-2020 Equity Formula Calculation (September 2012)
OVER/UNDER
CURRENT CONSTRUCTION ALLOCATIONS REVISED
MILES TO COMPLETE CERTIFIED CONSTRUCTION PROGRAM FROM PROGRAM
INTRASTATE SYSTEM POPULATION POPULATION PROGRAM ALLOCATION PRIOR PERIOD AI.�OCATION
DIVISION AS OF 6/30/11 � (2010) PERCENT A�LOCATION 2014-2020 FY 2000-2011 2014-2020
1 169.4 21.12% 264 607 2.76% 8.44% $642 $311 $953
� 2 63.2 7.88% 492 231 5.13% 6.32% $480 �$19�_ $461
3 _ _ _ _
3 52.9 6.59% 671 633 7.01 % 6.94% $527 $47 $574
� 4 23.4 2.92% 582 210 6.07% 5.55% $422 ($58) $364
' 5 57.3 7.14% 1403,857 14.64% 10.89% $828 ($20) $808
� 6 45.7 5.70% 670,201 6.99% 6.71% $510 $110 $619
� 7 79.5 9.91% 893 881 9.32% 8.93% $678 $118 $796
' 8 92.3 11.51 % 510 716 5.33% � 7.33% $557 $164 $721
9 19.2 2.39% 742,793 7.75% 6.26% $476 ($60) $416
� 10 26.6 3.32% 1393,248 14.53% 9.88% $751 $22 $773
� 11 56.3 7.02% 372 524 3.89% 5.48% $417 $43 $459
� 12 18.9 2.36% 735332 7.67% 6.21% $472 $109 $581
13 79.8 9.95% 497,409 5.19% 6.87% $522 ($26) $496
14 17.7 2.21 % 355,585 3.71 % 4.19% $319 ($12) $306
TOTALS 802.2 100.00% 9,586,227 100.00% 100.00% $7,599 $729 $8,327
The updated 10-year work plan released by the department in September 2012 caused adjustments in
the 2014-2020 STIP to reflect changes in project schedules and revenue forecasts. The total estimated
STIP allocation increased from $7.673 billion in the prior revenue forecast to $8.327 billion in September
5-S

REPORT DATE: 10/24/2012
2012 due to changes in projected future state and federal revenues. The prior revenue forecast and STIP
allocation assumed that the state motor fuel tax rate would remain constant starting in state fiscal year
2014. The current (September 2012) revenue forecast assumes that the state motor fuel tax rate would
be variable, adjusting based on the wholesale price of gasoline and diesel. This change in assumption
increased the STIP funding allocation. However, as it is the prerogative of the State Legislature to
override the variable motor fuel tax rate (as it did for a five-year period), the amount of state revenue
available to the department could change and thus impact the 2014-2020 STIP revenue allocation.
NCDOT will continue to re-evaluate the state and federal revenue forecasts and determine their impacts
to the 2014-2020 STIP allocation.
Highway Appropriation and Cash Flow Management
Appropriations made for transportation projects are subject to provisions in federal and state law and
budget acts. Per NC Gen. Stat. § 143C-6-11, transportation project funds shall be budgeted, expended,
and accounted for on a"cash flow" basis. Although NCDOT estimates the amount available for any
given STIP cycle, the entire amount is not provided to NCDOT at the beginning of the cycle. Instead,
NCDOT receives a portion of the total STIP appropriation annually. To manage transportation projects
on a cash-flow basis, the department has established management controls as well as financial reports
supported by statistical models that allow NCDOT to estimate the cash that will be available each year of
the STIP cycle. Transportation project contracts are planned and limited so that payments due at any
given time will not exceed the cash available to pay them. Therefore, if revenues fall short of
projections, a new project is introduced on the STIP, or a current STIP project is found to cost more than
previously estimated, NCDOT may not only have to delay projects in that particular Division, but also on
a statewide basis in order to maintain enough cash to fund the project.
Alternative Financing
NCDOT has received comments during the life of the STIP Project B-2500 that, due to the limited
amount of money available for the project through the traditional transportation funding process, the
department should pursue innovative financing for the project at either the federal or state level. FHWA
and NCDOT previously discussed other financing options and their applicability to STIP Project B-2500 in
the October 2009 Revised Final Section 4(f) Evaluation (Evaluation). As discussed in the Evaluation, state
legislation requires that, in order to convert an existing route to a toll facility, a free alternative route
must be available. NC 12 from Bodie Island is currently the only free route available to access Hatteras
Island. Further, a toll analysis conducted by the department concluded that toll revenues would not
support the debt service of required bonds.
Other financing and loan programs, such as Public-Private Partnerships, Transportation Infrastructure
Finance and Innovation Act (TIFIA) loans, and others, require a project to have an outside stream of
revenue in order to guarantee a return on investment. As the project will not be tolled, state bonds
would have to be issued against future state revenues, which would require a statewide public
referendum. In the past, the State has been able to issue similar bonds for programmatic-level
5-6

REPORT DATE: 10/24/2012
transportation efforts across the state, but not for a single project. The Evaluation includes an analysis of
the potential use of a TIFIA loan to fund the PSBC.
A portion of the current finance plan for Project B-2500 involves the use of federal-aid backed GARVEE
bonds. These bonds allow project finance based on future federal-aid apportionments. The total amount
of GARVEE debt is capped by State law. Current GARVEE capacity would not allow this mechanism to
fully fund construction of the PSBC. Approximately $70 million in GARVEE bond funds are programmed
for use on STIP Project B-2500.
At a state level, the most recent example of alternate project financing is the Interstate 85- Yadkin River
Bridge project, which was exempted from the state's Equity Formula under the Mobility Fund legislation
that was enacted in 2009. Projects that could receive monies from the Mobility Fund, and therefore be
exempt from the state Equity Formula, must be projects that "relieve congestion and enhance mobility,"
as is stated in the general statute. STIP Project 6-2500 is not eligible for this funding source.
Operation & Maintenance Finances
Routine maintenance of the PSBC would be funded through Division 1's share of the North Carolina
Highway Fund, rather than the STIP funding sources used in construction. The Highway Fund is not
subject to the Equity Formula; however, the department calculates the amount available to each
division based on several factors, including the amount of roads and bridges within a Division, their
condition, and that Division's total population. In 2011-2012, $970.9 million was available to the
department for highway maintenance projects statewide, with an additional $214.2 available for bridge
preservation projects. In some cases, major road or bridge maintenance projects can be funded under
the STIP, depending upon the availability of maintenance funds and the projected cost of the
maintenance needed. Most recently, NCDOT implemented STIP Project B-5014 to conduct extensive
maintenance on the existing Bonner Bridge.
As of 2012, even without a 17.5-mile bridge in place, Division 1 is already experiencing a shortage of
maintenance funding, in part due to the number of bridges within the division that currently require
more frequent maintenance because of their location within the harsh coastal environment. If the PSBC
was constructed, its initial impact on the division's maintenance budget would likely not be remarkable;
however, that impact would grow over time, becoming significant as additional rehabilitation and
maintenance is needed over the project's life.
The initial cost of installing ITS and other operational safety improvements (vehicle turnouts, etc.) will be
included in and funded under the initial construction contract of STIP Project B-2500. However, future
maintenance of these ITS and other improvements would likely be funded from the Division 1
maintenance budget.
5-7

REPORT DATE: 10/24/2012
Impact Analysis
Table 10 lists the total estimated construction, operations, and maintenance costs for the PSBC over the
next 50 years that were discussed in previous sections.
Table 10. PSBC Construction, Maintenance, and Right-of-Way Cost Estimate (50-year project life)1
Curved Rodanthe Terminus Intersection Rodanthe Terminus
Low High Low High
Construction $878 million $1.15 billion $876 million $1.146 billion
Bonner Bridge Demolition $10 million $10 million
Right-of-WayZ $6,890,000 $5,245,000
Operations (Installation) $5,085,000 $5,085,000
Subtotal (InitialSTIP projectJ $900 million $1.172 billion $896 million $1.166 billion
Operations and Maintenance $374 million $374 million
(Ongoing, 50-years)
Total $1.274 billion $1.546 billion $1.270 billion $1.540 billion
1 r. � ° ' ' � ° � ' ��� �' ' „-,,., °�°- �° ' ° ' ' " r ' ' �'
vvc� iiv� ni�iuuc �v��� a»v�ia�cu vviui vvcuaiiu aiiu ar�v iin�isa�ivii� vviii�ii vvvuiu uc iuiiucu a� uic uiiic
of construction. Estimate does not include the additional non-highway public costs assessed in the
SSDEIS and FEIS.
Z SSDEIS estimate.
The first four line items in Table 10 (Construction, Bonner Bridge Demolition, Right-of-Way, and
Operations equipment installation) would all be funded through the initial STIP project; this would
require NCDOT to have between $900 million and $1.172 billion available over the four-year estimated
construction period to fund the Curved Rodanthe Terminus option and between $896 million and
$1.166 billion available over the four-year estimated construction period to fund the Intersection
Rodanthe Terminus option.
NCDOT currently forecasts that $8.327 billion will be available for the 2014-2020 STIP; based on the
state Equity Formula, $953 million of this total will be available for projects in Division 1. These sums are
based on revenues anticipated during the STIP cycle. Due to uncertainty with state and federal budgets,
the amount of revenue available to the department, and thus the total 2014-2020 STIP allocation, is
subject to change.
At a minimum, the PSBC would utilize 94% of the Division 1 budget for 2014-2020; the estimated high
cost would exceed the amount available to Division 1 by $219 million, which is 23% of the Division's
budget. These percentages would change, likely increasing, if NCDOT does not receive all of the revenue
it estimates receiving for 2014-2020. If the PSBC were selected for project B-2500, no other major
construction project in Division 1 could be implemented until after the 2020 fiscal year. A few bridge
replacements or other small projects could be funded during the STIP period only if the contract
awarded for the PSBC was consistent with the department's low estimate for the project. Even if the
�3

REPORT DATE: 10/24/2012
demolition of the existing bridge and the installation of traffic operations equipment were postponed
until the next STIP period, the initial construction cost and right-of-way acquisition would still require at
least 93% of the Division 1 budget for 2014-2020. Given the diverse construction, safety, bridge
replacement, and maintenance needs in the 14 counties that comprise Division 1, this is not a
reasonable course of action for NCDOT. Division 1 currently has over 100 highway, bridge replacement,
and safety improvement projects included on the 2014-2020 STIP, including over 87 miles of roadway
widening projects on the major US and NC routes within the Division.
In addition to the projected budget constraints, the implementation of the PSBC could impact other
projects across the state, as the department would have to maintain a sufficient cash balance in order to
pay the contractor while the project is under construction. The department would be required to delay
other projects statewide based upon the amount of cash actually available.
As has been discussed in previous NEPA documentation for the project, the use of alternate innovative
financing for the PSBC is not a viable option to fully fund this project. In order to reduce the impacts of
the PSBC on the Division 1 2014-2020 STIP program, the department would have to pursue alternative
financing for at least a portion of the cost. However, the alternative financing methods available to the
department require an outside stream of revenue in order to repay the investment. The department has
not identified an outside revenue stream (for example, through bonds) that could make alternative
financing a viable option.
If the PSBC were constructed, NCDOT estimates that a minimum of $5.9 million would be required
annually to maintain the roadway approaches and the new bridge. That annual maintenance number
would increase by $84 million for a one-time major bridge rehabilitation project during the 50-year
project life. Unless STIP funds could be secured for the bridge rehabilitation project, all of the
maintenance costs would have to be funded via the state Highway Fund.
MAP 21
On July 6, 2012, President Obama signed into law the Moving Ahead for Progress in the 215Y Century
(MAP 21) Act, which authorized federal transportation funding for fiscal years 2013 and 2014. NCDOT
has not yet determined how MAP 21 will impact its funding allocation process or the amount of funds
that MAP 21 is expected to provide to the department; however, the department does not expect a
significant increase in federal funding availability. MAP 21 consolidates the Federal Fund programs
(listed earlier in this section) from which NCDOT receives funds; however, this consolidation does not
include any new eligibility criteria and is therefore not expected to impact the amount of money
available for STIP Project B-2500. Figure 3 illustrates the changes to the Federal Funds program.
5-9

REPORT DATE: 10/24/2012
Figure 3. MAP 21 Highway Funding Program Structure (Source: AASHTOJ
Consolidated Highway Program Structure
Current Program Structure MAP-21 Core Program Structure
Interstate Maintenance National Highway
,� Performance
National Highway System �I Program (NEW)
i —:_
;� $43J billion
Highway Bridge Program
Surface
Off-System Bridges Transportation
� � Program
SurfaceTransportation Program $20.1 billion
Congestion Mitigation
Congestion Mitigation and Air Quality " _� & Air Quality Program
� (CMAQ)
$4.4 billion
Highway Safety Improvement Program
Highway Safety
Improvement
Program (HSIP)
$4.8 billion
Metropolitan Planning ° Metropolitan
Planning
$626 million
Recreational Trails
Transportation
Safe Routes to Schools -- � Alternatives
(NEW)
$1.6 billion
Appalachian Highway Development —.
5-10

Conclusions

REPORT DATE: 10/24/2012
Conclusions
NCDOT has assessed the construction, right-of-way, operations and maintenance, and other costs
associated with the Pamlico Sound Bridge Corridor (PSBC) since its initial development in 2002. FHWA
and NCDOT concluded during the NEPA process for STIP Project B-2500 that an alternative within the
PSBC should not be implemented due to the magnitude of the construction costs associated with the
PSBC and the impact of those costs on NCDOT's highway program.
Following publication of the project's Record of Decision, NCDOT reassessed its estimates for the PSBC.
The updated costs of the PSBC are shown in Table 11.
Table 11. PSBC Cost Estimate (50-year project life)
Curved Rodanthe Terminus Intersection Rodanthe Terminus
Low High Low High
Construction $878 million $1.15 billion $876 million $1.146 billion
Bonner Bridge Demolition $10 million $10 million
Right-of-Way1 $6,890,000 $5,245,000
Operations (Installation) $5,085,000 $5,085,000
Subtotal (InitialSTIP projectJ $900 million $1.172 billion $896 million $1.166 billion
Operations and Maintenance $374 million $374 million
(Ongoing, 50-years)
Total $1.274 billion $1.546 billion $1.270 billion $1.540 billion
1SSDEIS estimate.
Based on the construction cost estimate developed in June 2012, the construction cost of the PSBC
decreased between 6% (low estimate) and 18% (high estimate) since the cost was last published in the
2008 Final Environmental Impact Statement (FEIS). The costs of operating and maintaining a bridge in
the PSBC increased approximately 5% from what was estimated in the FEIS.
The estimated construction cost is based on material prices and contingency estimates from three
contractors with extensive experience in bridge construction. Given the magnitude of the PSBC, it is
reasonable to seek input from contractors with this type of project experience. This approach has
allowed NCDOT to produce a reasonable estimate of the alternative because it was developed utilizing
the most current information available regarding material, equipment, and labor costs from three
independent sources. In addition, the department used the winning design-build bid for Phase I of STIP
Project B-2500 to account for the possibility of a bid that is lower that the department's estimates.
At the current time, NCDOT projects that approximately $953 million will be available for all highway
and bridge projects in Division 1 in the 2014-2020 STIP cycle. However, if actual state and federal
revenues differ from current forecasts, then the amount available to the entire STIP program, and to the
Division, could change. Based upon the most recent estimates, the combined up-front construction,
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REPORT DATE: 10/24/2012
right-of-way, bridge demolition, and operations costs associated with the PSBC would use at least 94%
of the Division 1 budget, which would require NCDOT to postpone almost all planned projects in Division
1 until after the 2014-2020 STIP cycle is complete. Division 1 would only be able to program a series of
small bridge replacement or other projects between 2014 and 2020 if the PSBC were to be constructed;
that conclusion assumes that the winning bid for the PSBC is consistent with the department's low cost
estimate for the project. The department cannot rely on the possibility of a low contractor construction
bid to make the PSBC less of a burden on the Division 1 budget. Even if demolition of the existing Bonner
Bridge and the installation of operations equipment were postponed to the next STIP period, the PSBC
would still require at least 93% of the Division 1 budget. Implementation of the PSBC would therefore
create a unique maintenance problem of extraordinary magnitude for the department, as it would have
to defer much needed maintenance improvements throughout the Division for a significant period of
time. A decision to build a bridge within the PSBC is not reasonable in consideration of the projected
bridge costs and the Division 1 budget.
Phasing the construction of the PSBC is not a reasonable option, since the new bridge could not be
opened to traffic until construction of the entire bridge was completed. This would take multiple STIP
periods to complete. While this could be considered a reasonable course of action for projects that
provide additional access to a destination, it is not reasonable for a project that provides the only free
access to a destination, as would be the case here. Given that the existing bridge has an extremely low
sufficiency rating and is rapidly approaching the end of its service life, phasing the completion of the
project over multiple STIP periods is not an acceptable option for the department.
While there is uncertainty as to the amount of future federal and state revenues available to NCDOT's
transportation program budget, there are no indications that the department's financial resources will
increase to the level necessary to support the construction of the PSBC and allow the department to
meet the most basic project needs of Division 1. Therefore, the construction of a bridge in the PSBC
would still present a unique problem of extraordinary magnitude to NCDOT, reaffirming the conclusions
in the 2009 Revised Final Section 4(f) Evaluation and the 2010 Environmental Assessment that the PSBC
is neither a prudent nor practicable alternative.
In addition to the initial construction cost of the PSBC, NCDOT estimates that a minimum of $5.9 million
would be required annually to maintain the roadway approaches and the new bridge. That annual cost
would increase by $84 million for a one-time major bridge rehabilitation project during the 50-year
project life. Maintenance of the PSBC would have to be funded through the state Highway Fund.
NCDOT conducted an analysis of possible alternative financing options for the PSBC during the NEPA
process for STIP Project B-2500; there are no alternative financing options (loans, bonds, tolls) that
would entirely support the construction cost of the PSBC. Based on the department's experience to date
in pursuing innovative financing, the department would also not be able to get enough innovative
financing to fund even a portion of the PSBC.
C:�

REPORT DATE: 10/24/2012
There is no new information on additional revenue sources or legislative changes that alter the
conclusions in the 2009 Revised Final Section 4(f) Evaluation or the 2010 Environmental Assessment.
Based on the information gathered during this inquiry, the department's conclusion that the PSBC is not
a prudent or practicable alternative, based on its cost and the potential impacts to the department's
budget, remains valid.
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